Public debt-to-GDP ratio for last year decreased by 7.1% and amounted to only 60.9%

The Accountant General at the Ministry of Finance, CPA Yali Rotenberg, published the first estimate of the debt-to-GDP ratio for 2022, according to which the public debt-to-GDP ratio for last year decreased by 7.1% and amounted to only 60.9% compared to 68% in 2021. Meaning: this is still At a slightly higher rate than it was before the coronavirus in 2019, but still at the largest-ever decrease in state debt in one year.
The data also shows that the ratio of government debt to GDP decreased by 7% and amounted to 59.2% compared to 66.2% in 2021. In 2020, the ratio of public debt to GDP was 70.7%. In this way, the public debt in relation to GDP completed a cumulative decrease of about 10% in the last two years and returned to the downward path that characterized it before the Corona crisis.
The sharp decrease in the ratio of debt to GDP was due to the sharp growth of the GDP (at a rate of 6.3%) as well as the decrease in the government debt (about seven billion shekels).
The year 2022 ended with a budget surplus of 0.6% of GDP, which was mainly due to the extraordinary increase in state revenues this year. The estimated debt-to-GDP ratio is a key indicator of the financial strength of the State of Israel and is also important for determining its credit rating, which when it is high, Israel can receive loans at low interest rates and thus avoid tax increases.
It should be noted that the credit rating companies have indicated in the past that it is possible to raise Israel's rating, but in recent days some of the rating companies have expressed concern that a legal and administrative revolution in Israel may harm the credit rating in the future.
Although the debt reduction is attributed to the outgoing government, the Minister of Finance, MK Bezalel Smotrich, said that "God willing, Israel's economy continues to march forward and demonstrate its strength and strength, which is reflected in the reduction of the GDP debt ratio and in the rapid recovery from the Corona crisis. We will continue, with God's help, to lead Israel's economy as an island of stability, with fiscal responsibility and the development of growth engines for the benefit of the State of Israel and all its citizens."
The Accountant General, CPA Yali Rotenberg: "The cumulative decrease over the past two years in the ratio of GDP debt and the return to the downward trend are of great importance in preserving financial stability and fiscal flexibility, which support the country's ranking in the challenging macroeconomic environment that is expected to accompany us in 2023 as well."
Senior Deputy to the Accountant General and Director of the Finance Division, Gil Cohen, added: "The State of Israel continues to stand out positively in relation to reference countries in debt to GDP trends over the past decade in general and the Corona crisis in particular. A return to the debt to GDP environment recorded before the crisis is an important marker for the rating companies and enables fiscal flexibility whose importance has been proven In 2020, with the outbreak of the Corona crisis, the strength of the Israeli economy and the debt-to-GDP ratio enabled a rapid and responsible fiscal expansion that helped the government deal with the crisis."